Sector ‘uncertainty’ causes 31% profit fall for envelope firm

Envelope specialist CA Group has seen its profit slide by nearly a third amid market “uncertainty”, according to its annual accounts.

The County Durham-based firm posted a pre-tax profit of £7.8m for the year to 30 September 2024, down from £11.4m in 2023.

The latest profit was derived from a turnover of £88.8m – down from £117.2m in 2023.

CA Group’s margin narrowed from 9.7 per cent to 8.8 per cent.

However, it increased its cash reserves from £17.3m to £21.7m and held no external bank loans.

The firm paid out an interim dividend of £8m during the year, down from £14m in 2023.

The fall in turnover in the latest accounts followed three consecutive years of revenue and profit growth.

After posting £57.8m in 2020, turnover rose to £77.6m in 2021 and £107.5m in 2022.

Similarly, a pre-tax profit of £3m in 2020 grew to £5m the following year and £7m in 2022.

In its latest accounts, the firm cited “uncertainty in the construction markets” as its principal business risk.

Nonetheless, CA Group, which designs, manufactures, supplies and installs industrial roofing and cladding systems, improved its cash position by 25 per cent to £21.7m.

And with future expansion in mind, in March this year the group bought more than 44,000sq ft of extra warehouse and office facilities at All Saints Industrial Estate in Shildon, about six miles from its headquarters in Evenwood.

“This investment further cements CA Group’s long-term aspirations, and provides excellent opportunities for further improving operational performance and capacity,” it said at the time.

CA Group ranked fifth in Construction News’ most recent Specialists Index for envelope contractors.

The company noted in its latest accounts that it had reduced its headcount by nine to 219, with jobs lost in its manufacturing and contracting businesses.

Despite this, managing director Neil Alderson said the firm “continues to recruit new employees who will add to the development of the business”.